Generally, flexible spending account balances do not automatically carry over to a new job. Funds are typically tied to the employer’s plan. Upon termination of employment, access to remaining funds may be limited by the specific plan’s rules, often involving a grace period or a run-out period for submitting eligible expense claims. For example, an employee who leaves a job in June might have until September to submit claims for expenses incurred before their departure. Failure to use remaining funds within the specified timeframe can lead to forfeiture.
Portability of these benefits is a significant consideration for individuals changing jobs. Loss of unspent funds can present a financial disadvantage, highlighting the importance of understanding employer plan details and available options. Historically, the lack of portability has been a key challenge associated with these accounts. This aspect reinforces the need for careful planning and spending strategies to maximize the benefit and avoid forfeiting contributions.
